Believing that his death was imminent, a widower gave his son some real estate two years ago, and

Believing that his death was imminent, a widower gave his son some real estate two years ago, and

filed a timely gift tax return. The widower died on January 1st of this year.

Additional facts are:

Widower’s basis in the real estate $150,000

Value of real estate when gifted 400,000

Value of real estate on date of death 800,000

Amount of gift tax paid by widower 121,600

Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:
A . The gift of the real estate is included in the calculation of the widower’s federal estate tax as an adjusted taxable gift.
B . The son’s income tax basis in the real estate is $800,000.
C . The gift tax paid is brought back into the widower’s gross estate at $121,600.
D . The widower recognized no gain for income tax purposes at the time the gift was made.

View Answer

Answer: B